RAKbank profit rises 26% on retail banking gains

Abu Dhabi: The National Bank of Ras Al Khaimah (RAKbank) Sunday announced that fourth quarter net profit climbed 26 per cent to Dh195 million compared with the same period last year.

For the year, net profit was up 14 per cent to Dh726 million on the back of a 38 per cent increase in operating profit. RAKbank, one of the smaller players in the UAE market, relies heavily on retail banking to generate revenues.

The bank has also bene-fited from a lack of exposure to the struggling Saudi conglomerates Saad and Algosaibi.

Banks such as Abu Dhabi Commercial Bank have had to set record provisions against borrowings by these companies.

Provisions

RAKbank did not disclose its provisions for the fourth quarter. The bank had not released its full financial statement at the time of going to press.

Through September, the bank set aside Dh167 million in provisions against non-performing loans, almost four times the amount provisioned in the first nine months of 2008.

"The operating environment in 2009 was probably the most difficult the bank has ever faced," Graham Honeybill, general manager, said in a statement.

"Liquidity issues which materialised at the end of 2008 continued into the early part of 2009 and there was a significant increase in delinquencies in the retail segment."

Compared with 2008, assets grew 23 per cent to Dh17 billion. Loans and advances also rose 23 per cent to Dh13.4 billion.